Scripps Networks Q1 Earnings Nicked By Rising Production Costs

The company behind HGTV, Food Network and other lifestyle channels has a great topline story to tell for Q1. The bottom line? Not so much. Net income came in at $151.2M, -3.7% vs the period last year, on revenues of $594.4M, +11%. The revenue figure was well above the $582.5M that analysts expected. But earnings attributable to Scripps Networks investors, at 72 cents a share, were 2 cents shy of the consensus forecast. The company says that ad sales and affiliate fees were both up 11% in early 2013, respectively to $395M and $187M. Food Network revenues came in at $208.3M (+4.8%), with HGTV at $206.0M (+10.9%), Travel Channel at $76.4M (+15.1%), DIY Network at $$31.9M (+15.4%), Cooking Channel at $26.3M (+32.7%), and GAC — Great American Country — at $6.4M (+28.2%). But expenses for the quarter, at $347M, were +17%. Scripps Networks says that the increased outlays were “driven by programming amortization expenses as the company invests to drive viewership” as well as “higher employee costs and investments in planned domestic and international growth initiatives.” The company has been struggling to boost its audiences in the U.S., where the pay TV market has plateaued, and to expand overseas. CEO Ken Lowe says that Scripps Networks has “demonstrated our commitment to investing in our brands by developing compelling content that engages millions of media consumers every day…In the process, we’ve created sustained, long-term financial returns and value for our shareholders.”